Weekly Market Report 06/02/14

This Week’s Headlines:

Gold
Silver
Recommended Investment Commitment and Diversification

GOLD

In my May 27th 2014 Weekly Precious Metal Report I complained that the Gold and Silver price activity in the past two months was as exciting as watching paint dry. Not anymore, as last week Gold and Silver’s trading volume and price volatility picked up dramatically. On the last trading day of May, Gold dropped $11 per ounce, down $45 for the week, closing at $1,246, the lowest price since February 3, 2014.

I can only explain Gold ending the month on its lows by saying that many commodity house and mutual funds managers don’t want to report to their investors that they had lost client’s funds in precious metals, so they sell late in the month and purchase back early the next month.

Last week’s Gold trading showed good support at $1,265 and $1,250 per ounce, but both levels didn’t hold. Since Gold has broken down below support level, it could test the $1,230 per ounce or maybe $1,200, if it doesn’t rally back above $1,250 per ounce early this week.

What caused last week’s price drop in Gold? A combination of a stronger U.S. Dollar versus the Euro and Yen, slowing demand for physical metal, and reports of improving U.S. economic indicators, are driving down prices. Precious Metal traders believe that if the U.S. economy continues to recover it is likely that the Federal Reserve will start to increase interest rates which is negative for precious metals.

What was really surprising last week was the lack of Gold and Silver sellers. Normally, after breaking major price support levels, I receive calls from concerned precious metal owners who wish to unload all or part of their holdings. It wasn’t just my company it was nationwide, as the premiums for precious metal investment products were unchanged or even higher. If there is any serious precious metal selling the premium on physical Gold and Silver products drop.

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SILVER

In the face of the drop in the price of Gold, Silver showed extraordinary strength, holding above the $19 per ounce level until Friday. Last Friday, when Gold broke down below the $1,250 level, the Silver support disappeared and it traded as low as $18.62 per ounce. For the week, Silver dropped $0.74 per ounce, closing at $18.68 before rallying in late trading to $18.81. The Silver/Gold ratio is now 66.70 to one.

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Recommended Investment Commitment and Diversification:

Precious Metal commitment: Minimum of 40% of investment capital

Diversification:  Gold 50%, Silver 45%, Platinum & Palladium 5%

Diversification includes 50% in long term investment quality rare coins and 50% short term bullion products

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If you want to be updated on what is happening in the Gold, Silver, and Rare Coin markets any weekday, our company offers a daily blog Monday through Friday at www.stupplerblog.com

All statements, opinions, pricing, and ideas herein are believed to be reliable, truthful and accurate to the best of the Stuppler & Company’s knowledge at this time.  Stuppler & Company disclaims and is not liable for any claims or losses which may be incurred by third parties while relying on information published herein.  Individuals should not look at this publication as giving finance or investment advice or information for their individual suitability.  All readers are advised to independently verify all representations made herein or by its representatives for your individual suitability before making your investment or collecting decisions.

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